Privately held promissory notes (typically $0 to $10 million) need to be valued for gift/estate, tax, and related party transactions. However, bonds from publicly traded companies are not comparable because publicly traded companies are large, diversified, and represent much less risk. Note buyers typically discount the outstanding balance of privately held notes to yield a return of 12% to 20% depending on the collateral and other risk factors. Since corporate bonds yield around 4% to 6%, the difference in yields is significant and using corporate bonds might overvalue a privately held note. Business development corporations (BDC) are publicly traded entities that make loans to small and medium-size, privately held businesses. Their rates can be used as a base rate for the buildup method of determining a market rate of return. Expert Bruce Johnson discusses the issues with privately held notes and how to value them using BDC rates and presents real-world examples to illustrate the methodology.